Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Saturday, November 18, 2017

Pakistan Per Capita Cement Consumption Hit New High of 170 Kg in 2016

Pakistan's domestic cement consumption reached 35 million tons in 2016, up from 30 million tons in 2015, according to a report published by Global Cement. Using the latest census population of 207 million, it works out to about 170 Kg per person consumption. The increase is driven by a combination of CPEC-related infrastructure projects as well as commercial and housing construction.

While domestic demand for cement is continuing its upward trend, the exports have suffered a major decline. In 2009, the exports hit a high of over 11 million tons, constituting 34% of all cement dispatches at the time. Since then, they have fallen to below 6 million tons or 14% of all sales.

Pakistan cement industry is booming. There is some disagreement about where the biggest demand is coming from. The CEO of Thatta Cement says it is 60% infrastructure and 40% housing but others say it is 70% housing and 30% infrastructure.

Pakistan's 11 cement manufacturers are investing a combined $2.25 billion to add new production capacity of 30 million tons a year by 2019, according to a media report attributed to the State Bank of Pakistan.

The year 2017 is also proving to be yet another boom year for cement industry. Cement sales have soared by 15% year-on-year to 10.3 million tons in the first quarter of fiscal year 2017-18 that ended in September 2017, up from 9 million tons in the same period in 2016.

Pakistan is among the world’s fastest-growing construction markets. A BMI report published earlier in 2017 forecasts an average 12 percent growth annually for the next five years. Cement capacity utilization increased to 88 percent in the 10 months through April, the highest in 11 years, according to Bloomberg.

Beyond the construction industry boom, Pakistan's large scale manufacturing (LSM) sector is also soaring by double digits. Both of these sectors are important drivers for job growth in the country.

Although production was driven mostly by strong domestic demand, the exports in July-Sept 2018 also increased nearly 11% over the same period last year.

Significant improvement in the country's security situation is helping restore confidence of investors, businesses and consumers who are pushing economic growth in Pakistan to new highs. The fast pace of execution of China-Pakistan Economic Corridor (CPEC) related projects is at least partly responsible for it.

27 comments:

The statistics about the consumption are tricky. If 70% of consumption is directed towards housing then this trend is like Lithium. You never know that is it a medicine or a slow poison?

An increase in housing demand indicates that people are earning enough to afford housing. However, on the other hand, if infrastructure is lacking far behind, then the property prices fall after some time. This is due to insufficiency of infrastructural support to the residents. This what exactly happened in Greece, a few years back.

Development of infrastructure and human capital is what ensures that you are on the right track. Though, there is a good news that exports are picking up and the industry is thriving. However, we still don't have much good news from the agriculture and textile sector, which makes up about 65% of our exports.

Suhail: "Though, there is a good news that exports are picking up and the industry is thriving. However, we still don't have much good news from the agriculture and textile sector, which makes up about 65% of our exports."

Agriculture and textile making up 65% of exports is not a good thing. Pakistan needs to diversify its exports to more high value areas like engineered products and pharma which is starting to happen but very slowly.

It'll take a lot more investment and knowledge of outside markets to build export orientation of industry in Pakistan.

GDP is forecast to grow by 6 percent this year from 5.28 percent in the 2016-2017 financial year.

Pakistan is expected to become the world’s 20th largest economy by 2030 and the 16th largest by 2050 based on results of previous years. It is also expected to be the world’s fastest-growing Islamic economy in 2017. This is no small feat considering that it was engulfed in turmoil a few years ago. Six years ago Al-Qaeda leader Osama Bin Laden was killed by the US navy seals during a bloody shoot out that shocked the world in a compound in Abbottabad, as the war on terrorism continued.

The government says the phenomenon has cost the the country $68 billion in direct and indirect impact between 2000 and 2010. The army is always on the street - a reminder of the precarious situation that Pakistan still finds itself in.

Even the 750 delegates from 85 different countries who attended the Emerging Pakistan initiative had to be under full time police escort. Snipers on top of buildings are a common site in the country. But the country wants to reclaim its national image and narrative and present it for what it truly is: positive and full of potential.

Pakistan is building a brand that communicates the opportunities to a diverse audience that includes investors both international and local. Organisers says the attendance was double the size from last year.

Year on Year growth for a single year is fraught with problems. A more reliable way to gauge growth in commodities and consumer goods is to look at 5 year trends unless you are a trader. Also, many do not report down years and certainly not with as much enthusiasm.

Arif: "A more reliable way to gauge growth in commodities and consumer goods is to look at 5 year trends unless you are a trader. Also, many do not report down years and certainly not with as much enthusiasm."

Take a second look at the graph in the post. It goes back 8 years to 2008.

It's not very smart to judge Pakistan's future growth by the last few years performance in the midst of high-levels of terror that depressed investment and productivity. Pakistan has grown much faster in earlier years, particularly in 1960s, 70s and 80s and from 2000-2007.

My prediction is that IMF's forecast will be wrong just as it has been wrong for much of the world since its inception.

Pakistan has seen a considerable decline in number of terror fatalities in 2016, according to a recent report.

Global Peace Index 2017, a detailed report containing data on terrorism released last week observed there were 736 terror attacks in Pakistan during 2016, which resulted in 956 deaths, a 12 percent decline in terror-related deaths from 2015.

The report said the Taliban in Pakistan, "was responsible for 283 deaths in 2016, which accounted for 30 percent of the deaths from terrorism that year,” the report noted.

“Most of these deaths resulted from suicide bombings. The largest bombing targeted Christians celebrating Easter Sunday in Lahore and killed 79 people.”

The report noted the reduction in terrorism fatalities is due to a significant drop in Pakistan Tehreek-i-Taliban’s activities. The terror group has been responsible for more than 4,500 killings since 2000 in the country.

The 108-page detailed report is produced by the Institute of Economics and Peace, an Australian based research group that compiles a yearly terrorism report after gathering data from 163 countries based on global trends of terrorism, terror fatalities, terror recruitment, profiles of terror groups and economics of terrorism.

Despite being placed in the five most impacted countries by terrorism in the world, Pakistan has shown positive results of its efforts to combat terrorism, the fifth edition of the global terrorism index noted.

“The reduction in deaths from terrorism is in part attributable to Operation Zarb-e-Azb by the Pakistani Army; a military effort which started in mid-2014,” said the global terror report.

Pakistani lawmakers say the concrete steps taken by the government to root-out extremism have proved successful.

“Military operations Radul Fasad [rejection of discontent] and Zarb-e-Azb [sharp strike], National Action Plan, execution of terrorists in the military courts — all these policies by the government have given us desired results against terrorism,” Abdul Qayyum, chairperson of Pakistan’s Senate Defense Committee and leading member of the ruling party PML-N told VOA.

“We had three flash points in Pakistan that were Karachi, Balochistan and FATA [Federally Administrated Tribal Areas] region. We still see a few terror incidents here and there but it is almost 70 percent less than the past. This shows our resilience and commitment against terrorism,” Qayyum added.

While the defense analysts believe the statistics of the report are encouraging, they also emphasize Pakistan needs to stay vigilant and undeterred in the fight against terrorism that poses a continued threat to its national security.

“The facts mentioned in the global index are satisfactory and Pakistan should continue with a more powerful strategy to fight against terrorism and a will to execute it,” Maria Sultan, a defense analyst from Islamabad told VOA.

“We also need help from national and international community because terrorism is not only Pakistan’s issue, but is a joint problem of the region,” Sultan added.

Extremism and militancy have remained a big challenge for the South Asian region particularly Pakistan and Afghanistan for decades now — where insurgent groups such as al-Qaida and Islamic State have paved ways, established networks and launched numerous deadly attacks on both sides of the border.

Pakistan says it is determined to combat terrorism and claims several military operations launched in recent years have helped dismantle terror networks in the country.

Pakistan alleges, despite its efforts, it is still a victim of terrorism because Afghanistan harbors Taliban and IS militants who use Afghan soil to attack Pakistan.

Majumdar: " By contrast, India's pc consumption is 225 kg, but now the industry is growing very slowly at around 3-4%."

Here are a couple of data points from an India cement report from 2016:

India's per capita consumption is around 190 kg asof 2015, compared to the world average of over 350 kg percapita, which shows great potential for growthThe cement consumption growth rate in the country haswitnessed a decline from 9.56 per cent in 2001 – 02 to 5.50per cent in 2014 – 15

Askari: "2012 Pak cement production was 35 MT same as 2016 but population was 20 million less."

Wrong!

You need to look at both production and consumption data as well as recent population growth rate.

The 2.34% population growth rate reported in 2017 Census means Pakistan population in 2016 was 204 million and 2012 it was 195 million.

Pakistan's cement production in 2012 was 32 million tons and domestic consumption was 25 million tons.....it works out to 128 Kg per person domestic consumption for 2012. Now it's over 170 Kg per person.

The US$57 billion second phase of the China-Pakistan Economic Corridor (CPEC) – an ambitious plan to integrate sea and land routes across Eurasia under China’s Belt and Road Initiative – is moving along, guided by a joint cooperation panel’s decisions at an Islamabad forum.

The 7th meeting of the joint cooperation committee for the CPEC began on Monday.Decisions reached at the parley are expected to affect the corridor’s ability, when completed, to link China’s western provinces to Pakistan. The project, agreed to in 2013, is one of the most costly undertakings of the Belt and Road Initiative, a massive infrastructure plan which also includes motorways, railways, pipelines and power lines.Here are five of China’s biggest investments in the Pakistan arm of the Belt and Road Initiative.

1. Gwadar Port

Gwadar Port is a main element of the CPEC because it could provide an alternative shipping route for transporting oil into China.Under the agreement, state-backed Chinese Overseas Ports will manage the free-trade zone on a 43-year lease with control of all the port’s business affairs. The port is expected to go into full operation in three to four years.The deep seaport that sits next to the Strait of Hormuz, the major oil route in and out of the Persian Gulf, could help China reduce its reliance on shipping oil through the Malacca Strait, a route frequently patrolled by the US.

2. Karot Dam Hydroelectric Power Project

The 720 megawatt Karot hydro-project is backed by the state-owned China Three Gorges Corp South Asia Investment Limited.The US$ $1.42 billion project that began in December 2016 could finish nine months ahead of its December 2021 completion date, according to the company.

3. Direct current transmission line from Lahore to Matiari (Sindh)

The 660kV high-voltage direct current (HVDC) transmission line from Lahore to Matiari would help solve an energy shortage in Pakistan. Once completed, the line would be capable of sending about 4,000MW of electricity from coal power plants to Northern Pakistan, helping Pakistan to satisfy an energy demand that is expected to grow by 6 per cent to 35,000MW by 2024.

4. Karachi Circular Railway (KCR)

The Karachi Circular Railway (KCR) in Pakistan’s coastal city of Karachi was expected to be revived and upgraded by the Chinese government to meet a completion date of September 2020.

5. Karakoram Highway

Beijing announced in 2015 that it would finance the 1,300-kilometer Karakoram Highway that is currently the only overland cross border connection between China and Pakistan.Situated at the Karakoram mountain range at an elevation of 4,693 metres above sea level, the highway was built in 1978 but has been in deep disrepair owing to lack of maintenance and a 2005 earthquake.

With the fiscal deficit recorded at 1.2 percent of the gross domestic product (GDP), the federal government's financial operations and debt statistics for the first quarter of the current fiscal year (1QFY17) show strong performance and prudent expenditure.

On one hand, the revenue collection — especially that from taxes — registered a strong growth of over 20 percent during 1QFY17, while, on the other, the government's domestic and external borrowings were kept under check, a finance ministry spokesperson said in a statement here Tuesday.

The spokesperson stated that there were expenditure controls as well, which reflected on the prudent fiscal management and government's resolve to maintain this momentum in the remaining quarters of the year.

Based on the actual data, the overall fiscal deficit during 1QFY17 was recorded at 1.2 percent of the GDP as opposed to 1.3 percent during the last year's corresponding period, the spokesperson added.

He said the total consolidated federal and provincial revenue amounted to Rs. 1.025 trillion, which reflects an 18.9-percent increase over same period last year.

The tax collection by Federal Board of Revenue (FBR) amounted to Rs. 765 billion — denoting a hefty growth of over 20 percent — while the non-tax receipts for the period amounted to Rs. 114 billion, which are also higher when compared to the same period, last year.

The total expenditure during the period amounted to Rs. 1.466 trillion, of which the current and development expenditures were Rs. 1.241 trillion and Rs 0.221 trillion, respectively.

The statistical discrepancy for the period July-September 2017 amounted to Rs. 4 billion compared to Rs. 38 billion during last year's same period.

The spokesperson said the civil accounts data of the federal government's revenue receipts and expenditure in 1QFY17 was received from the office of Accountant General Pakistan Revenues (AGPR), financing data from Economic Affairs Division (EAD) — external financing — and from the State Bank of Pakistan (SBP).

Likewise, the civil accounts data of the provincial government's revenue receipts and expenditure in 1QFY17 was received from the provincial Accountant General (AGs).

He added that the deficit figure reported earlier was based on the SBP's daily cash balance reports, which did not include the financing on account of project aid and financing from National Savings Schemes.

The financing from project aid was substantially higher on account of roads and infrastructure, he said.

The spokesperson said around 47 percent of the budget estimates were received as project aid financing during July-September 2017 on that account.

This has mainly been received during September 2017, while incremental receipts on account of National Savings Schemes have recently been reported by the SBP, he added.

The federal government deposits with the SBP, he stated, also reduced during September 2017.

Therefore, after including the aforementioned financing data, the overall fiscal deficit for the July-September 2017 period amounted to 1.2 percent of the GDP against 1.5-1.8 percent of GDP projected by some analysts.

The spokesperson said a section of the media had drawn some premature conclusions on debt performance of the government based on the data for the first two months of the current fiscal year. He clarified that choosing to evaluate debt statistics based on two-month numbers was a flawed method that led to misrepresentation.

He said as debt numbers from relevant agencies — such as Economic Affairs Division, Budget Wing, National Saving and State Bank — were received and consolidated for 1QFY17, it had become quite clear that the upwards bump in public debt was well below the analysts' forecasts.

“The seasonal pattern along with robust growth in large scale manufacturing index observed during Jul-Sep 2017 suggests that advances to private sector will rise in Q4CY17,” the central bank said in the quarterly performance review of the banking sector on Tuesday.

“Less than normal seasonal fall in advances along with improved liquidity and strong solvency – well above the minimum benchmark – are the key highlights of the 3rd quarter of CY17.” Though gross advances to private sector decreased Rs5.4 billion in July-September 2017, they were significantly lower than the contraction of Rs112.2 billion during the same period of last year.

“Banking sector’s asset base has expanded marginally during third quarter, though, on year-on-year basis, the growth has been quite robust (16 percent),” the central bank said. “Encouragingly, share of fixed investment (long-term) loans in total loans continues to rise indicating improved business confidence.”

The central bank said low interest rates help credit flow into the real economy. “However, the banking sector’s review showed that corporate borrowing was a little bit disappointing during the third quarter.”

It further added that advance-to-deposit ratio inched down 48.3 percent in July-September 2017 from 48.7 percent in the previous quarter. The central bank suggested banks to boost their ability to maximise benefits from pickup in economic activity driven by China-Pakistan Economic Corridor.

“In order to deliver better performance, banks need to calibrate the changing macroeconomic environment in their business models to capitalise the emerging opportunities as arising from, generally, growth in the economy and, particularly, from the China Pakistan Economic Corridor (CPEC),” it said.

The SBP said the risks to the resilience of the banking sector are likely to remain muted in the last quarter of 2017 as capital adequacy ratio is expected to remain well above the minimum regulatory requirement despite narrowing return margins and anticipated rise in risk weighted assets.

Banks posted profit of Rs111.7 billion in the third quarter, as compared to Rs89.9 billion in a quarter ago. The central bank said earnings of the banking sector have moderated due to low interest rates and increased administrative expenses, in addition to one-off settlement payment made by a large bank.

Advances demand from textile and other sectors (agriculture, automobiles, electronics etc.) have been promising. Noticeably, the share of fixed investment (long-term) advances in overall advances is persistently rising.

Banks have continued to invest in short term MTBs while investment in PIBs and Sukuk have declined. The deposit mobilization has remained on track, primarily, on the back of growth in saving and fixed deposits.

Asset quality has improved as Non Performing Loans (NPLs) to gross advances (infection) ratio has moved down to 9.2 percent as of end September 2017 from 9.3 percent as of end June 2017.

However, profitability has moderated further with the banking sector earning profit (before tax) of PKR 195.3 billion during Jan-Sep, 2017 (ROA of 1.6 percent and ROE of 19.1 percent).

Encouragingly, Net Interest Income (NII) has improved (Year-on-Year basis) on account of rising interest earned on advances. Capital Adequacy Ratio of the banking sector at 15.4 percent is well above the minimum required level of 10.65 percent and advocates that banks have enough buffers available to meet additional financing need of the market.

Pakistan: Cement sales rose by 12% year-on-year to 22.2Mt in the last six months of 2017 from 19.8Mt in the same period in 2016. Data from the All Pakistan Cement Manufacturers' Association (APCMA) shows that domestic consumption rose by 17.4 % to 19.8Mt from 16.9Mt, according to the Express Tribune newspaper. However, exports continued to decline in the period by 17.3% to 2.9Mt from 2.4Mt. Exports fell in most parts of the country, particularly in the south, despite increases from plants in Punjab and Khyber-Pakhtunkhwa. The APCMA has blamed this on high industry costs, foreign imports and local legislation.

KARACHI: DG Khan Cement on Wednesday announced the start of the country’s biggest cement plant with around 9,000 tons/day capacity at an estimated cost of over $300 million as construction sector is booming in the market seeing a double-digit growth in the commodity’s demand.

“DG Khan Cement has completed the installation of Pakistan’s largest cement plant at Hub, Balochistan,” the cement maker said in a statement to the Pakistan Stock Exchange. “The largest vertical cement grinding mill with cope drive has started trial operations together with cement silos and packaging plant. Also, successful commissioning has been completed in raw material crushing, transportation and storage departments.”

The new plant has a capacity to produce 8,500 to 9,000 tons/day and was expected to employ 1,000 workers.

DG Khan Cement is the third biggest cement producers in the country with a production capacity of 14,000 tons/day. The cement market has now four cement plants: two located in Dera Ghazi Khan, one in Chakwal and new one in Hub.

“The cement produced in the trial run is being dispatched to customers,” the company said. “Announcement of commercial production will be made in due course of time.”

The company has been setting up the plant using European technology for the past one decade, and is estimated to cost Rs35 to Rs40 billion. The cement maker had signed an agreement with K-Electric for 40 megawatts of electricity needed for the plant.

Cement sales increased 15.1 percent to 38.996 million tons during the first 10 months of the current fiscal year of 2017/18 due to infrastructure uplifts and recovery in exports.

Local cement consumption and exports stood at 33.880 million tons in the corresponding period a year earlier, according to All Pakistan Cement Manufacturers Association’s data.

Contribution of south-based mills in aggregate sales and exports stands at around 18 percent as they sold 6.087 million tons in the local markets and exported 1.236 million tons in the July-April period.

Pakistan’s 24 cement plants have capacity of producing 47 million tons of clinker and 49 million tons of cement a year.

Local cement industry is massively investing in capacity enhancement in view of China-Pakistan Economic Corridor projects, which are estimated to cost more than $57 billion.

They planned to increase production capacity by 26 to 28 million tons to 72 million tons plus within the next two to three years.

The World Bank today approved $145 million to expand home owner-ship including women and the poor through access to affordable housing finance in Pakistan.

The Pakistan Housing Finance Project (PHFP) will support Government of Pakistan’s vision and strategy for housing development. The project will extend financial and technical assistance to Pakistan Mortgage Refinancing Company (PMRC), the Planning Commission (PC), and other institutions to increase availability of mortgage financing for households. Nearly a third of country’s population does not own homes and this pressure is rising with growing demand.

“This project will spur the development of housing mortgage market in the country and make housing fi-nance affordable and reachable to many Pakistanis,” said Illango Patchamuthu, World Bank Country Di-rector for Pakistan. “The beneficiaries will include women and low-income groups through improved incen-tives for ecofriendly homes.”

The project adopts an innovative approach including crowding in commercial financing for home ownership and providing greater incentives for women to become home owners. It also incentivizes people to build energy efficient and green homes and adopt climate and disaster-resilient construction designs and materi-als.

“Pakistan’s mortgage finance to Gross Domestic Product ratio of 0.25 percent is extremely low compared to the South Asia average of 3.4 percent,” said Korotoumou Ouattara, World Bank Senior Financial Sector Economist. “There is a significant market gap across all segments of the population. The creation of PMRC marks an important step in achieving the Government of Pakistan’s objective to improve access to housing finance in the country. The project will address the liquidity constraints of lenders, support capital market development, and create an enabling environment for a sound national housing policy.”

PHFP is financed by the International Development Association, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of 5 years.

Local cement sales stood at 40.8 million tons in the last fiscal year, while its exports marginally rose 0.9 percent to 4.7 million tons, bringing the total cement dispatches 12.9 percent up to 45.5 million tons.

“Growth in local and export dispatches fared better… thanks to higher infrastructure demand from CPEC- (China-Pakistan Economic Corridor) related projects, real estate construction activities across Pakistan and increase in exports from Lucky Cement and Attock Cement new cement lines that came online in 2HFY18,” analyst Nabeel Khursheed at Topline Securities said in a report.

“Moreover, due to expected increase in competition in south region owing to upcoming capacities, players are tapping into new export markets that also supported export growth.”

Khursheed said construction sector reported nine percent growth in FY2018, which was in line with the last 5-year average growth rates.

“This was on the back of economic recovery and booming real estate sector. Credit to construction sector as of May 2018 stood at Rs156 billion, up 21 percent,” he added. “After being in the doldrums in 1HFY18 (witnessing average 16 percent year-on-year decline), exports recovered in the second half, recording stellar average growth of 37 percent thanks to higher exports from Lucky and Attock Cement’s new cement lines in the South region as well rupee devaluation.”

There are 24 cement manufacturers operating in the country with Lucky Cement Limited having the biggest production capacity of nearly five million tons. Bestway Cement, Maple Leaf Cement, Attock Cement Pakistan, Kohat Cement Company are also the major producers with two to four million tons of operational capacity.

Industry utilisation stood at 95 percent in FY2018 as compared to 87 percent in FY2017, 85 percent in FY2016, 78 percent in FY2015 and 75 percent in FY2014.

“The utilisation this year will be a 2.5 decade high. The highest utilisation of 92.7 percent was recorded in FY1996,” Khursheed said.

The analyst said pricing remained a big concern for the industry despite outstanding domestic consumption during the year. Cement industry shed 42 percent during the last fiscal year due to rising input cost and increase in production capacities.

“Producers’ ability to pass on any hike in input cost (higher coal prices and rising transportation cost due to increase in international oil prices) going forward will depend on growth in local demand,” he added.

Cement prices in northern region averaged Rs529/bag in FY2018 versus Rs534/bag in FY2017. Cement prices in the northern region started to decline as low as Rs496/bag on an average after August last year. But, prices posted a recovery after March when cement makers passed higher coal cost and impact of federal excise duty on to consumers. Khursheed said free-on-board ‘Richards Bay’ coal prices increased 20 percent to $93.6/ton in FY2018. It is currently hovering at around $104.25/ton.

“If coal prices remained at this level, manufacturers may find it difficult to pass on the cost owing to upcoming cement capacities.”

In June, cement sales are likely to fall 30 percent month-on-month and rise three percent year-on-year to 2.5 million tons due mainly to Ramazan and Eid holidays. Cement exports, however, are expected to decrease 10 percent month-on-month and increase 10 percent year-on-year.

Pakistan's cement and construction industry received foreign direct investment (FDI) of US$766.3m during the 12 months of FY17-18 (July -June), compared to US$501.9m received in corresponding months of last fiscal year. This translates a YoY growth of 53 per cent, says the State Bank of Pakistan (SBP).

The breakdown shows that cement industry attracted FDI of US$59m and the construction industry US$707.30m compared to US$36m and US$465.90m, respectively in July 2016-June 2017.

According to SBP, the cement industry makes a direct contribution of 7.5 per cent to large-scale manufacturing. Moreover, the cement manufacturers will expand their production capacities aggressively, from 49.4Mta to 72.8Mta in the next few years, and the additional capacity would result in the imports of machinery of around US$1.5bn (near PKR178bn) over next few years, says SBP.

In the cement industry, the cost of machinery imports comes around 70 per cent of total cost of the unit/project. This means, the overall estimated cost of expansion would be around PKR254bn (US$2bn).

#Pakistan #automobile sales up by 21% in July-June 2017-18. Total car sales have gone up by 21 per cent in the last fiscal year with 216,786 units sold as compared to 185,781 units in the last fiscal year. #Manufacturing #economy https://profit.pakistantoday.com.pk/2018/07/11/cars-sell-up-21-per-cent-in-july-june-2017-18/ via @profitpk

In June 2018, auto sales were up 20 per cent YoY to 15,662 units whereas it was down 15 per cent month-on-month (MoM) due to the Eid holidays during June.

In a comment to Pakistan Today, Pak Kuwait Investment Company AVP Research, Adnan Sheikh said that “Auto sales have been increasing mainly due to a low-interest rate environment and the advent of ride-sharing apps, along with the introduction of new models like Civic BRV, Fortuner and The Wagon-R which have all performed well. But major growth in numbers comes from below 1000cc cars, mainly the Wagon-R for the price-conscious buyer and ride sharing captains. Mehran and Wagon-R together added around 20,000 additional unit sales. So you can see most buyers are in the price conscious category, whereas Honda’s sales grew because of two new models – new Honda Civic and BRV. While Toyota shifted production from the Corolla to the high-profit margin Fortuner and Hilux, volumes for the Fortuner more than tripled. Going forward, we may witness a slowdown in growth / potential dip in sales if car prices keep rising due to a rupee depreciation and higher international commodity prices, along with a sharp rise in interest rates and a spike in fuel prices; and the market will become extremely competitive when new players start producing with cost advantages under ADP incentives over the next two years”.

For the Fiscal Year ended 2018, Pakistan auto sales (including LCVs Vans and Jeeps) rose by 21 per cent year-on-year (YoY) with growth seen in all segments. “The strong performance was due to a multitude of reasons ranging from supportive macroeconomic environment, cheaper financing, demand from ride-hailing services, as well as demand generated from election activity,’ said an analyst at Topline securities. This slowdown in car sales is due to higher car prices as the company raised car prices for the third time during this fiscal year, continuous Pak-rupee depreciation against the dollar, he added. The major reason of declining car sales is the restriction imposed by the government on non-filers for booking and registration of new cars, and resumption of import of used and new cars through personal transfer or baggage scheme, the analyst said.

Pakistan cement industry's FY19 started positively in terms of exports with rises in the first month July 2018. According to the Federal Bureau of Statistics, Pakistan's cement industry earned foreign exchange revenue of US$20.96m by exporting 475,134t of cement last month compared to US$16.31m on 369,506t of cement. This reporesented growth of 28.56 per cent and 28.59 per cent in terms of value and quantity respectively on MoM basis.

In local currency terms growth of 34.38 per cent was seen to PKR2.60bn (US$21.2m). However, compared with July 2017 earnings of US$22.96m on 428,489t of cement it translates to a fall of 6.91 per cent in earning of foreign currency. Quantity rose by 10.89 per cent YoY.

MBF Group agrees to build $970 million medical city in #Islamabad, #Pakistan. - will include a world-class 400-bed #university #hospital . Once completed it is projected to serve 1 million patients and clients on a monthly basis.

Sheikh Mohammed bin Faisal Al Qassimi says his flagship development company MBF Group has reached an agreement with Ibchez Housing and Nixon to build an integrated medical city in Islamabad. Total investment for the project is expected to total $970 million.

Located within the 100,000sqm Gulberg Greens development, the project will include the construction of a 400-bed university hospital which will be capable of delivering international and advanced standards of care in the Pakistani capital. Once completed it is projected to serve 1 million patients and clients on a monthly basis.

The founder and owner of the UAE-based developer added that the medical city will also comprise Pakistan’s first medical mall as well as therapeutic and recreational areas, a regional cardiology centre, and an orthopaedic centre.

The Gulberg Greens Medical City will also be the location of a new nursing college.

MBF Group is working with Nixon for the first time, and its a partner will represent the group in Pakistan, said Al Qassimi. As well as the develoment, the group will manage the city’s 1,000 medical, technical and administrative Pakistani staff and is responsible for providing medical equipment and beds.

In a statement published on WAM, Al Qassimi was quoted as saying there is a growing demand for advanced medical services in Islamabad and provide specialist health services that are in short supply.

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About Me

I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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